Via intraday trading Tuesday, S&P 500 declined below lower edge of 10-Week Price Channel to suggest “official” reversal of uptrend begun in early October. Minor support created back on April 10 (1357.38—S&P 500) was also penetrated Tuesday.

How quickly short-term “Oversold” conditions begin to take hold within context of developing intermediate weakness will determine where first rebound will occur.

Until Intermediate Cycle also becomes “Oversold,” however, market could remain vulnerable to renewed selling pressures.

Given ongoing “reluctance” of majority of our key indicators to confirm market strength into recent highs, presumption is strong selling could carry on downside far further than many market practitioners expect.

Three indicators, MAAD, CPFL, and CV that measure Smart Money bias, sentiment, and the power of buying continue to indicate market underpinnings remain weak and that price action could adjust accordingly.

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Index

Daily / Weekly / Monthly Stops

Weekly

Monthly

5/7

5/8

5/9

5/10

5/11

5/11

5/31

S&P 500 Index

BUY 1394.36

BUY 1398.63

BUY 1400.69

BUY 1402.05

BUY 1401.07

SELL 1369.70

SELL 1175.98

Dow Jones Industrials

SELL 13042.98

SELL 13074.37

SELL 13104.35

SELL 13128.33

SELL 13119.36

SELL 12918.39

SELL 11273.01

NASDAQ Composite

BUY 3039.96

BUY 3048.72

BUY 3052.54

BUY 3056.05

BUY 3048.61

BUY 3057.13

SELL 2485.38

Value Line Index

BUY 3014.53

BUY 3024.81

BUY 3028.13

BUY 3030.40

BUY 3024.39

BUY 3077.34

SELL 2543.91

Note: Stop levels, a function of the extant trend, are based on the trailing moving average price channels for the Highs or the Lows of an index. Whether or not a specific index is suggesting a “Buy” or Sell” is determined by whether or not index prices are above or below the current channel Stop levels. Stop levels should only be used as an entry or exit guide and in conjunction with other market entry and exit strategies.